The Federal Government Continues the First Home Loan Deposit Scheme

by Ranjan Khatak Director and founder of Your Finance Adviser

The very popular First Home Loan Deposit Scheme is back again with first home buyers once again set to benefit.

The latest Federal Budget has put a clear focus on helping first home buyers get into a new home and as a result, the FHLDS has been extended and expanded.

However, there are some key changes that will impact first home buyers.

What Is The First Home Loan Deposit Scheme?

The First Home Loan Deposit Scheme is a program that allows first home buyers to purchase a property with as little as a 5 per cent deposit without being forced to pay lenders mortgage insurance (LMI).

In many cases, LMI can cost a homebuyer upward of $10,000 and can significantly hurt the chances of a first home buyer getting into a new home. Under the program, the Federal Government effectively guarantees the difference between what the first home buyer has saved and the 20 per cent deposit that most lenders require, which helps in reducing the LMI burden.

The Government only makes 10,000 places available, so it is important to act quickly if you’re interested in taking up the scheme.

Changes To The First Home Loan Deposit Scheme

The most notable change has been the focus put on buying a new or a newly built home.

The program has also been expanded with the thresholds increased across the country, meaning there will be more homes that will be available for first home buyers to purchase with the help of the scheme.

State	Capital city/regional centre – new cap	Capital city/regional centre – previous cap	Rest of state – new cap	Rest of state – previous cap
NSW	$950,000	$700,000	$600,000	$450,000
VIC	$850,000	$600,000	$550,000	$375,000
QLD	$650,000	$475,000	$500,000	$400,000
WA	$550,000	$400,000	$400,000	$300,000
SA	$550,000	$400,000	$400,000	$250,000
TAS	$550,000	$400,000	$400,000	$300,000
ACT	$600,000	$500,000	N/A	N/A
NT	$550,000	$375,000	N/A	N/A

Some of the largest increases have come in both Sydney and Melbourne, where house prices are generally higher. Both states have increased their caps by $250,000 to $950,000 and $800,000 respectively. While the other states and regional areas have increased the threshold by between $100,000 and $150,000.

Round three of the FHLDS began on Tuesday (October 6) and places with the 27 lenders are limited to 10,000.

The starting point to access the program is to speak with a mortgage broker to find out if you qualify and meet the list of eligibility criteria.

It’s also important to note that you must also be able to qualify for finance based on normal serviceability requirements.

The other advantage of the FHLDS is that it is able to be used in conjunction with other state and federal incentives including the FHOG and various state building grants. However, it is worth noting that the cut-off period for these building grants is fast approaching and building contracts need to be signed prior to the end of the year depending on your state.

Get Assistance Of YFA’s Home Loan Expert In Australia

There are various schemes set up by the federal government to benefit first-time home buyers. First Home Loan Deposit Scheme is one of them and has been extended and expanded with a few changes. If you are opting for FHLDS, a trusted lending specialist is all you need to guide you throughout the process. And in the wake of responsible lending laws being axed quickly, you need to understand how much faster and easier credit can be accessed. Our commercial property Mortgage brokers in Sydney, Australia, can assist you in every step to make the process of getting credit and loans easier and affordable.

Here are a few advantages of opting for solutions from YFA:

We will find a better rate for your loan so that you can save on interest with a lower fixed or variable interest rate.
Our process is simple and it is easy to apply online, over the phone and in the branch.
We can help you settle things in less than a week so that you save time and effort.
We have access to 30 lenders and 1,000 different loan products through our well-informed lending specialists
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source: The Federal Government Continues the First Home Loan Deposit Scheme Your Finance Adviser